My accountant says I need to give him a 1099-NEC? First year S Corp owner confused about requirements

Your accountant is actually correct here. As an S Corp, you're required to issue Form 1099-NEC to any unincorporated service provider you pay $600 or more during the tax year. This includes accountants, lawyers, contractors, and yes, even beauty professionals if they're business expenses. The key distinction is whether the payment is a legitimate business expense for your S Corp and whether the recipient is operating as an independent contractor (not incorporated as a C Corp). If you're deducting these expenses on your S Corp tax return, you generally need to issue the 1099-NECs. For services like hairstyling and esthetician work, it depends on whether these are legitimate business expenses for your entertainment career. If your appearance is directly related to your profession and these services are ordinary and necessary business expenses, then yes, 1099s would be required if they're independent contractors.

I was in the exact same boat last year with my new S Corp and was totally confused about all the 1099 requirements. After struggling to track down tax IDs and missing the filing deadline, I found https://taxr.ai which literally saved me from a complete meltdown. It helped me identify which vendors actually needed 1099s (turns out not everyone on my accountant's list qualified) and walked me through getting the right info for each one. The system even shows which ones are exempt because they're corporations. Plus it handles all the filing with the IRS so I don't have to mess with the forms myself. Trust me, as a fellow entertainment industry person who was clueless about S Corp requirements, this made the whole process way less painful than I expected.

I was in the exact same boat last year with my new S Corp and was totally confused about all the 1099 requirements. After struggling to track down tax IDs and missing the filing deadline, I found https://taxr.ai which literally saved me from a complete meltdown. It helped me identify which vendors actually needed 1099s (turns out not everyone on my accountant's list qualified) and walked me through getting the right info for each one. The system even shows which ones are exempt because they're corporations. Plus it handles all the filing with the IRS so I don't have to

Just wanted to update that I ended up trying out taxr.ai after my initial skepticism, and it seriously simplified everything. My situation had like 25 different vendors ranging from my agent (who's with a big agency - no 1099 needed) to random independent photographers and stylists (all needed 1099s). The system automatically sorted them correctly AND sent them secure links to provide their tax info without me having to awkwardly ask for SSNs. It even integrated with my accounting software to pull the payment amounts. Just filed all my 1099s for the year in like 30 minutes when I was expecting days of headaches. For anyone running a new S Corp in entertainment where you work with tons of different service providers, definitely worth checking out before the filing deadline hits.

So I've been dealing with this exact issue and spent literally HOURS trying to get through to the IRS to clarify which vendors needed 1099s (my accountant gave me conflicting info). After being on hold for like 45 minutes then disconnected THREE times, I used https://claimyr.com which got me through to an actual IRS agent in about 20 minutes. You can even see a demo of how it works at https://youtu.be/_kiP6q8DX5c The agent confirmed what others have said here - S Corps do need to issue 1099-NECs to unincorporated service providers paid over $600, but not to corporations or LLCs taxed as corporations. She also explained that if I've been paying people without collecting W-9s, I should start gathering them now rather than waiting. This literally saved me days of frustration and potential penalties for incorrect filings.

I want to publicly apologize for my skeptical comment about Claimyr. After getting yet another "due to high call volume" message from the IRS yesterday, I decided to try the service out of desperation. It actually worked exactly as described. I got a call back about 25 minutes later connected directly to an IRS agent who answered my S Corp 1099 questions. No hold music, no automated system navigation - just straight to a human who could help. For those wondering about the 1099 requirements for S Corps, the agent confirmed you DO need to issue them to unincorporated vendors paid over $600, but there are exceptions for certain payment types and corporate entities. She also mentioned that hairstylists/makeup artists are typically business expenses for entertainment professionals if they're directly related to gigs/performances. Definitely worth using if you need clarification directly from the IRS.

Your friend who's had an S Corp for years and hasn't been issuing 1099s is probably doing it wrong and risking an audit. I've been running my S Corp production company for 8 years, and yes, we absolutely have to issue 1099-NECs to qualifying vendors. A few important things to know: - You only issue 1099s to individuals and partnerships, not corporations - You need to get W-9 forms from everyone BEFORE paying them - You don't have to issue 1099s for payments made by credit card - The deadline for sending 1099s is January 31st - There are penalties for failing to file The entertainment industry is notorious for being casual about this stuff, but the IRS doesn't care. They'll still hit you with penalties if you don't comply.

One thing nobody's mentioned yet - if your hairstylist, makeup artist, etc. are actually doing work for specific gigs/shoots rather than just your regular personal maintenance, make sure you DOCUMENT this connection. I got audited two years ago and the IRS questioned several of my beauty/styling expenses. I had to prove they were for specific paid performances and not just "personal grooming." Keep a calendar showing the connection between the service and your paid work. Also, the S Corp 1099 requirements are absolutely real. My accountant actually has me use a 1099 service because I was messing them up trying to do it myself. Saved me from several penalties!

OP, ignore everyone saying you need to 1099 absolutely everyone. This is what accountants do to cover themselves - tell clients to over-file rather than risk missing required filings. Here's what you ACTUALLY need to know: - You don't issue 1099s to corporations (get W-9s to verify) - You don't issue 1099s for credit card/third party payments (PayPal, Square, etc) - You need to classify expenses correctly (personal vs business) Your hairstylist at SuperCuts doesn't need a 1099. Your independent hair person who comes to you before shoots probably does. Your accountant structured as a sole prop needs one, but if they're an LLC taxed as a corp, they don't. Don't just blindly issue 1099s to everyone. Get W-9s, understand the rules, and file accordingly.

As someone who just went through my first year of S Corp 1099 filings, I can confirm your accountant is right but there are some nuances that might help reduce your stress. The good news is you don't need 1099s for EVERYONE on that list. If your hairstylist works at a salon that's incorporated, or if you paid any of these vendors via credit card or business payment platforms like Square, those don't require 1099s from you. Here's what saved me time: I created a simple spreadsheet tracking each vendor, how I paid them (cash/check vs credit card), their business structure (got this from W-9s), and total annual payments. This helped me quickly identify who actually needed 1099s versus who didn't. Your friend who's never done this might be flying under the radar, but the penalties for missing 1099s can be substantial ($50-$280 per form depending on how late). Better to be compliant from the start. One tip: for vendors you'll work with regularly, get their W-9 forms upfront when you first hire them. Makes tax season way less stressful than scrambling to collect everything in January.

I went through this exact same confusion when I started my S Corp two years ago! Your accountant is absolutely correct - S Corps do need to issue 1099-NECs to qualifying service providers, but the key word is "qualifying." Here's what helped me sort through the maze: Start by understanding that you DON'T need to issue 1099s to corporations, LLCs taxed as corporations, or for payments made via credit card/third-party processors. This eliminates a lot of vendors right off the bat. For your entertainment industry expenses like hair/makeup, these can absolutely be legitimate business deductions if they're specifically for performances, auditions, or professional appearances. Just make sure you can document the business purpose - I keep notes linking each service to specific gigs or professional events. The W-9 collection process gets easier once you establish it as standard practice. I now require W-9s before making any payments over $100 to new vendors. Most professionals understand this is normal business procedure, though some personal service providers might need a gentle explanation about why you need their tax info. Don't feel bad about not knowing this initially - the entertainment industry is notorious for informal payment practices, but as an S Corp you need to follow corporate tax rules. It's a learning curve but you'll get the hang of it!